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2017 DIGILAW 67 (ORI)

Sakthi Sugars Ltd. v. Regulated Market Committee Kendupatna

2017-01-13

B.R.SARANGI

body2017
JUDGMENT : B.R. SARANGI, J. M/s Sakthi Sugars Limited, the petitioner herein, is a company registered under the Companies Act, 1956. It is a leading sugar manufacturing company in the State of Tamilnadu and has undertaken the responsibility to augment manufacture of sugar in the State of Odisha by reviving the defunct sugar factories in the cooperative sectors. Accordingly, it set up a new sugar factory at Haripur, Dhenkanal which commenced production in the year 1995. Sugarcane is the basic raw-materials for manufacture of sugar. The petitioner after setting up of the sugar mill, made all round efforts to make the farmers conscious of the profitability of sugarcane cultivation and as incentive, extended various assistance to the farmers beginning from ploughing of land till the sale of the sugarcane in the factory including setting up of lift irrigation facilities and digging bore-well, and in the process it invested huge amount in the districts of Dhenkanal, Cuttack and Puri. 2. Sugar being an essential commodity, starting from purchase of sugarcane till disposal of sugar, the petitioner is governed by various statutes. The Government of India in exercise of powers under the provisions of the Sugarcane Control Orders, 1966 prescribes the rates of sugarcane each year to be purchased by the sugar factories by notifying the rates. In addition to the same, the State Government fixes the rates at still higher rate for purchase of sugarcane and also fixes various subsidy for the cultivator for transportation. Consequentially, all the sugarcane cultivators have been protected against the exploitation. As per the agreement with the sugarcane cultivators, who are registered with the petitioner-company as royats, they are to supply sugarcane produced in their registered land at the petitioner’s factory at Haripur, Dhenkanal and payments are made to them on the basis of the weights of sugarcane so sold by them, after due weighment of the sugarcane at the factory’s weigh bridge. As per the notification of Government of India, initially sugarcane was to be procured within the peripherial area of 30 k.ms. from the mill site, but the same did not meet the requirements. As a result, recommendation for further 15 k.ms. distance was made for collection of sugarcane. But due to various reasons, since it was not possible to follow the norms and conditions, the petitioner-company collected sugarcane beyond 100 k.ms. from the mill site, but the same did not meet the requirements. As a result, recommendation for further 15 k.ms. distance was made for collection of sugarcane. But due to various reasons, since it was not possible to follow the norms and conditions, the petitioner-company collected sugarcane beyond 100 k.ms. distance from the factory site and in order to encourage supply of sugarcane it granted high transport subsidy. For collection of sugarcane since market fees are being charged at the RMC check gates under the provisions of Orissa Agricultural Produce Markets Act, 1956, the petitioner-company has sought for direction to the opposite parties not to indulge in levying market fees on it over the sugarcane on RMC check gates and further sought for direction to refund the amount so collected by the opposite parties as market fees. 3. Mr. B.P. Tripathy, learned counsel for the petitioner strenuously urged that the petitioner is not liable to pay any market fees for purchase of sugarcane at the factory site from the sugarcane cultivators. It is stated that by adopting coercive method in detaining the vehicles at the RMC check gates, since the market fees have been collected pursuant to notification dated 09.01.1996 under the Orissa Agricultural Produce Markets Act, 1956, the same is arbitrary and unreasonable and contrary to the provisions of law. Therefore, the amounts so collected, by undue exercise of powers, are to be refunded by the opposite party to the petitioner-company forthwith. 4. Ms. S. Ratho, learned Addl. Govt. Advocate states that the notification dated 09.01.1996 has been issued in conformity with the provisions contained in Orissa Agricultural Produce Markets Act, 1956. Therefore, if any purchase of sugarcane is made by the petitioner within the declared market area, it is liable to pay the market fees pursuant to the said notification. In that view of the matter, no illegality or irregularity has been committed by the authority in collecting such market fees from the petitioner. 5. Mr. S. Mohanty, learned counsel for the contesting opposite party states that the petitioner is liable to pay the market fees in conformity with the provisions contained in Orissa Agricultural Produce Markets Act, 1956 pursuant to notification issued by the State Government on 09.01.1996. Consequentially, the levy, as has been made by the authority, is wholly and fully justified. 6. Mr. S. Mohanty, learned counsel for the contesting opposite party states that the petitioner is liable to pay the market fees in conformity with the provisions contained in Orissa Agricultural Produce Markets Act, 1956 pursuant to notification issued by the State Government on 09.01.1996. Consequentially, the levy, as has been made by the authority, is wholly and fully justified. 6. To provide for better regulation of buying and selling of agricultural produce and the establishment of markets for agricultural produce in the State of Orissa, the legislature of State has enacted an Act called “The Orissa Agricultural Produce Markets Act, 1956” (hereinafter referred to “1956 Act”). The object and reasons of enactment of such Act is to prevent the agricultural producer from unfair practice and undue exactions of a host of middlemen on whom he has to depend for marketing his surplus produce. It has been estimated that the Agricultural Producer is able to get only 5 to 19 annas in the rupee paid for his produce by the ultimate consumer. Therefore, unless the Agricultural Producer is assured of his legitimate share of the price paid by the consumer for his produce, it will not be possible to bring about any improvement in the standard of living of the cultivations and sustain the progress achieved in expanding agricultural production. The unfair practices that are commonly practiced by the wholesale traders in the course of their transactions with the agricultural producers are unfair deductions, non-use of standard weights and measures, unfair manipulation of weighing and measurement, taking very large quantities of free samples, levy of excessive market charges etc. The producer is also not in possession of market intelligence and is at the mercy of the brokers and commission of agents who are always on the side of the wholesale traders. 7. Under the Scheme of the Act, the State Government in exercise of its powers under Section 3 of the Act, issued notifications of its intention of regulating the purchase and sale of specified agricultural produce in the specified areas and in exercise of powers under Section 4, the Government by notification declared the area so specified in Section 3 notification or any portion thereof, to be “market area” for the purpose of the Act in respect of such agricultural produce, as specified in the notification. After notifying the market area, the government is empowered under Section 4(5) of the Act to notify “market yards” and “markets” in the “market area” specifying the area over which each market shall extent around the respective market yard. After notifying the “market areas”, “market yards” and “markets”, the State government is empowered under section 5 of the Act to establish a “market committee” for every “market area” in respect of the agricultural produce. The market committee so constituted consists of 17 members from various areas as specified in Section 6 and the Sub-Collector of the area is the Ex-officio Chairman of the market committee. Section 11 of the Act empowers the market committee to levy and collect “market fees” of specified amount from every purchaser in respect of the agricultural produce “marketed in the market area”. 8. In view of the aforementioned provisions, it is ample clear that levy of market fees by the market committee comes to picture only when the agricultural produce is marketed in the market area. As per the provisions contained in proviso to Section-4, market fee could be levied on the agricultural produce only when it is sold in the markets within the market area. Thereby, the State Government has by notifications declared various “market areas” in the state and has set up statutory regulated market committee. Such committees are empowered to levy fees on the purchasers of the goods in their respective market areas as contemplated under section 11 of the Act. The regulated market committee for different market areas of the State during the seasons for procurement of sugarcane detained the trucks at various check gates established by the market committee and on speculative basis levied market fees, though the sale has not been taken place and the agricultural produce is not marketed in the market area. Even though the petitioner made representations to the government, the same has not been considered. Consequentially, the petitioner has been harassed by imposing market fees in detaining the vehicles in the check gates of the regulated market committee pursuant to notification issued on 09.01.1996 by the State Government. 9. While entertaining the writ application, this Court passed interim order on 23.12.1998 to the following effect: “Call this case on 12.1.1999. Consequentially, the petitioner has been harassed by imposing market fees in detaining the vehicles in the check gates of the regulated market committee pursuant to notification issued on 09.01.1996 by the State Government. 9. While entertaining the writ application, this Court passed interim order on 23.12.1998 to the following effect: “Call this case on 12.1.1999. As an interim measure, we direct that there shall not be any recovery subject to filling of an undertaking by the petitioner to pay any amount if ultimately payable. It is made clear that in the event of the undertaking being filed, there shall not be any collection.” 10. In the counter affidavit filed by the opposite parties, justification has been made with regard to collection of market fees from the petitioner and it is stated that since the purchase has been made within the areas of the market committee, the regulated market committee is entitled to collect the market fees. As the petitioner has obtained the license from the market committee to operate in the market area, it is liable to pay the market fees demanded by the authority pursuant to notification issued on 09.01.1996. But during pendency of the writ application, the notification issued on 09.01.1996 in exercise of power under Section 11 of the 1956 Act imposing market fees over the sugarcane has been withdrawn pursuant to notification dated 06.04.1998. Consequentially, no market fees have been collected from the petitioner from that date. Sri S. Mohanty, learned counsel for the opposite party states that withdrawal of the notification has been challenged in a Public Interest Litigation bearing OJC No.17859 of 1998, which is pending before this Court for adjudication. To which, this Court expresses no opinion at this stage, as the same has separate cause of action for the petitioner which is to be adjudicated in the said writ application. 11. In view of such position, the claim made by the petitioner, that it is not liable to pay any market fees, is no more required to be adjudicated, as the notification, basing upon which the said market fees have been collected on sugarcane, has been withdrawn pursuant to subsequent notification dated 06.04.1998. As a result therefore, the writ application, to the aforesaid extent of collection of market fees from the petitioner, has become infructuous. As a result therefore, the writ application, to the aforesaid extent of collection of market fees from the petitioner, has become infructuous. So far as refund of the market fees is concerned, since it has been collected pursuant to the notification dated 09.01.1996, liberty is granted to the petitioner to approach the appropriate authority by way of filing representation, which shall be considered in accordance with law by giving opportunity of hearing to the parties. 12. The writ application stands allowed to the extent indicated above. No order as to cost.